October sales improve at department stores

WASHINGTON -Sales at general-merchandise department stores gained a modest but respectable 0.4 percent in October over September, according to the U.S. Department of Commerce. This retail category finished the Halloween month with nearly $26.8 billion in total sales.

Coupled with the announcements by some of the nation's major retail chains that they had either met or beat Wall Street's guesses on their third-quarter results, the store picture as a whole has looked a lot worse. Whether this actually results in a healthy holiday shopping season is still another question.

Because of the increase in general-merchandise sales-and because apparel specialty stores posted a dramatic 1 percent increase in October sales (to $12.2 billion)-the National Retail Federation stood by its prediction for a 5.5 percent to 6.5 percent increase in 2000 holiday retail sales over last year.

David Orr, chief economist with First Union Economics Group, supported this analysis. "Looking at [October retail sales], it would seem that the Fed is getting just what it wanted-a gradual moderation in consumer spending," he said.

Overall, the Commerce Department pegged October U.S. retail sales at just short of $273.2 billion, 0.1 percent above their September level. This includes a major downward drag from the auto sector, whose October sales fell 1 percent, to $67.2 billion.

Aside from the apparel sector's strong showing, retailers of building materials experienced a boom market last month, pushing sales up 1.6 percent over their September level, to $15.3 billion.

The drug/proprietary channel also saw a small outburst, increasing its sales last month by 1.4 percent, to $11.4 billion.

First Union's Orr noted that, overall, U.S. retail outdid the analysts' predictions for a 0.1 percent drop in October. "Given the fact that September's 0.9 percent jump [in overall retail sales] was not revised downward, the October number gets the fourth quarter off to a decent start," he added.